Texas and EPA Battle Over Greenhouse Gas Regulations

The State of Texas is now pursuing its legal battle against the Environmental Protection Agency's greenhouse gas (GHG) regulations in the D.C. Circuit. In February, the Fifth Circuit granted the EPA's motion to transfer the pending litigation to the D.C. Circuit. Since December, 2009, when the EPA issued a final rule finding that GHGs were air pollutants, the agency has moved to regulate GHGs under the Clean Air Act (CAA). Provisions of the CAA require states to create state implementation plans (SIPs) designed to improve air quality to meet national standards. In April, 2010, the EPA announced that starting on January 2, 2011, states would need to ensure that their SIPs regulated GHG-emitting sources within state borders. If a state's plan failed to do so by that time, the state could lose its authority to award construction and modification permits for major emitting facilities required under the CAA's Prevention of Significant Deterioration (PSD) program. In September, 2010, the EPA proposed a decision that thirteen states, including Texas, needed to revise their SIPs to regulate GHG-emitting sources. In December, 2010, the EPA issued its final decision that each of these state's plans were deficient and needed to be modified to address GHG emissions. EPA noted that only Texas had failed to set a deadline for making the necessary modifications and instead had "said that it does not intend to submit a SIP revision." Two days after EPA's decision, Texas Governor Rick Perry and Attorney General Greg Abbott challenged the EPA in the Fifth Circuit. Under the CAA, parties seeking judicial review of nationally applicable regulations must file their challenges in the D.C. Circuit. The Fifth Circuit found that EPA's decision was a nationally applicable regulation because it applied to thirteen non-neighboring states. Therefore, the Texas lawsuit belonged in the D.C. Circuit, where the case has now been transferred. On December 30, 2010, the EPA announced that because Texas had no plans to revise its SIP by January 2, 2011, the agency would take over Texas's permitting operations from that date until the state submitted a revised SIP. The agency has assumed authority over Texas's PSD permits pending the ongoing litigation.

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